08/14/2015 03:41 EDT | Updated 08/13/2016 05:59 EDT

Alberta Health Services Cuts Ties With Australia's Sonic Healthcare

Please credit Connor Mah if used elsewhere.
EDMONTON — Alberta’s health minister is putting the brakes on the handover of Edmonton and area medical lab services to a private Australian company next March.

Sarah Hoffman says she has told Alberta Health Services to cancel a contract with Sonic Healthcare.

Hoffman says she doesn’t have enough evidence to prove that expanding private delivery of lab tests is beneficial to Albertans, so her department will do a provincewide review.

She says there’s no deadline for when the review will be completed, but she'd like it done as soon as possible.

Alberta Health Services awarded Sonic a $3-billion contract last October, but current lab provider DynaLife filed an appeal.

Friends of Medicare and the Health Sciences Association of Alberta, which represents lab technicians, say they are pleased with the government's decision.

"This is really being driven by policy," Hoffman said Thursday. "And the policy that I have is that I’m not going to be making one-off decisions on a hunch.

"I want evidence to be able to guide those decisions and I don’t have that evidence today."

The NDP government has also cancelled a request for proposals from companies looking to take over the DynaLife contract next spring.

Vickie Kaminski, CEO of Alberta Health Services, said work will begin immediately on a plan to ensure laboratory services will continue after the contract expires.

"I want to assure the people of Edmonton and northern Alberta that there will be no disruption of lab services with the cancellation of the (request for proposals)," she said in a news release. 

The health-delivery agency also released a report by a panel established last fall to review the DynaLife appeal.

The appeal panel found that AHS breached its duty of fairness in considering proposals for a lab provider. It made three recommendations on how to best move forward.

The appeal panel's findings are moot given that Hoffman has put a stop to the search.

At the time of the Sonic announcement last fall, Kaminski said the company offered the best lab services value for the money.

Sonic was planning to build a large new lab in Edmonton and was predicting its contract would generate at least $200 million a year in revenue.

But health-care advocates were worried that the Sonic deal struck under the former Progressive Conservative government would move the province a step closer to private health care.

The Opposition Wildrose said the NDP government's decision is driven by ideology and not by what's best for patients in Edmonton and northern Alberta.

"We've been hearing there were challenges with the contract, and the review process needed to be fixed, but rejecting this proposal and future proposals based purely on ideology serves only to hurt patients in the long-run," said Wildrose health critic Drew Barnes.

"The rejection of successful private health delivery within a publicly funded and administered system that leads to lower costs and stronger outcomes is bad news for our health-care system."

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